Pricing Leverage May Be Shifting to Carriers, Index Says

March 02, 2010

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For the first time since July 2008, Internet Truckstop's Market Demand Index has risen above 7 last week, an indication that pricing leverage has shifted in favor of the motor carrier.

Internet Truckstop's MDI measures relative truck demand, which means it gauges how much demand there is for the available trucks that are in the market. When the MDI is below 7, pricing leverage typically resides with the shipper or freight broker.

"Since August 2008, the long-haul trucking industry has clearly been in a broker/shipper market from a rate negotiation standpoint, but that is quickly changing," said Joel McGinley, an executive consultant for Internet Truckstop. "Load availability and truck demand are going to continue to increase and I would not be surprised to see the MDI reach double digits by the summer.

"The freight market in the truckload sector is realizing greater demand for two reasons, freight tonnage is increasing and there are fewer trucks in the market," he continued. "Truck capacity began to decline in August of 2007 and has continued since then. This strengthening of demand should help to stop the overall loss of capacity and should help to improve the overall freight rates."

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